DeFi insurance protocol Firelight began underwriting Oct. 7, deploying its initial coverage positions to two vaults operated by institutional DeFi firm Sentora. The protocol's insurance payouts are backed by 50.02 million XRP staked on the Flare network.
The XRP backing is valued at approximately $76.1 million at current prices. Firelight has established an aggregate cap of $115 million for its staked XRP positions.
Firelight was incubated by Sentora, the same firm whose vaults are receiving the first cover. The initial positions target Sentora's USD Protected Vault and Protected RWA Vaults.
Claims against Firelight's coverage require a three-out-of-five majority vote from a consortium of five institutions. An audit report for Firelight's underwriting contracts is forthcoming.
Firelight raised $8 million in a funding round led by Gumi Cryptos Capital. The protocol's use of staked XRP on Flare for backing DeFi insurance expands XRP's utility within the institutional DeFi ecosystem, offering on-chain cover for structured products.
